A global transition to carbon-free energy could save $31 trillion by 2050 by reducing the cost of financing renewable energy projects in emerging economies, while delivering $54 trillion in cumulative health benefits through cleaner air, according to an international review co-authored by a researcher from the Birla Institute of Technology and Science (BITS) Pilani.
The review, published in the journal Applied Energy, found that 91% of new utility-scale electricity capacity commissioned worldwide in 2024 was already cheaper than the least expensive new fossil-fuel alternative. The levelised cost of electricity from onshore wind and solar photovoltaic (PV) projects fell to $0.034 and $0.043 per kilowatt-hour, respectively.
Titled Pathways towards a carbon-free energy system: Technological advances, policy barriers, and integrated decarbonization strategies, the study examines the technological, financial and policy measures needed to accelerate the global energy transition.
The paper was led by Prof. Hussein Togun of Thi-Qar Technical College, Southern Technical University, Basrah, Iraq, and co-authored by researchers from Iraq, India, Saudi Arabia and Chile, including Prof. Bhupendra K. Sharma of the Department of Mathematics at BITS Pilani.
The researchers argue that renewable energy has reached a stage where it is not merely an environmental necessity but also an economically competitive option for new electricity generation. However, financing constraints, inadequate grid infrastructure and policy barriers continue to slow deployment.
Financing costs hold the key to savings
One of the review’s most significant findings concerns the cost of capital for renewable energy projects in emerging economies.
The same wind or solar project can cost up to three times more to finance in an emerging economy than in a developed market because of perceived political, currency and market risks.
Reducing the cost of capital from around 10% to 5% could deliver the largest savings in the global energy transition, exceeding the benefits achievable through further reductions in technology costs alone, the researchers estimate.
Closing this financing gap could save $31 trillion by 2050 and help unlock $54 trillion in cumulative health benefits associated with cleaner air. Nevertheless, achieving net-zero emissions at the required pace would require approximately $150 trillion in cumulative global investment through mid-century.
Prof. Togun said the review moves beyond individual technology assessments to offer an integrated roadmap for the energy transition.
“By linking techno-economic performance with policy design and financial mechanisms, we aim to equip decision-makers with actionable insights to accelerate deployment of renewable energy systems and overcome the structural barriers that currently slow progress,” he said.
Integrated approach to decarbonisation
The review introduces an Integrated Techno-Economic-Policy-Social (TEPS) framework, which treats decarbonisation as a coordinated transformation involving technology, finance, governance and society.
The framework emphasises that replacing fossil-fuel generation with renewable energy alone will not be sufficient. Countries must simultaneously expand electricity storage and transmission networks, reform power markets, mobilise investment and develop policies that support the transition.
The urgency is underscored by rising greenhouse gas concentrations and global temperatures. The study notes that atmospheric carbon dioxide concentrations exceeded 420 parts per million in 2023, while global temperatures had risen by approximately 1.1–1.2°C above pre-industrial levels.
Even if existing national climate pledges are fully implemented, the world remains on course for warming of 2.4–2.6°C by 2100, the review estimates, exceeding the temperature goals of the Paris Agreement.
Prof. Sharma said mathematical modelling and integrated planning would be critical to balancing the costs and reliability requirements of future energy systems.
“Achieving a carbon-free future is not merely a technological challenge but a complex socio-technical transition requiring coordinated action across finance, governance, and infrastructure,” he said.
The study highlights the role of mathematical modelling in optimising electricity generation, storage and transmission to minimise system costs while maintaining reliability.
Lessons from countries leading the transition
The review draws on international case studies to identify approaches that could help countries accelerate renewable energy deployment.
Denmark’s development of an offshore wind industry illustrates the importance of long-term targets, competitive auctions and coordinated grid planning. Iceland demonstrates how hydropower and geothermal energy can support an electricity system with a low carbon footprint.
South Australia’s experience of generating more renewable electricity than the state requires on certain occasions offers lessons in maintaining grid stability as conventional power generation declines.
China’s manufacturing scale and India’s auction-led renewable energy expansion represent different approaches to increasing deployment, particularly in emerging economies.
The researchers argue that countries need to expand transmission capacity ahead of generation growth, strengthen cross-border electricity connections and deploy storage technologies to accommodate the variable output of wind and solar power.
Health and employment benefits
The economic case for decarbonisation extends beyond lower electricity costs and reduced emissions.
The review links fossil-fuel combustion to approximately 8.7 million premature deaths annually worldwide, highlighting the potential public health gains from reducing air pollution.
Renewable energy also represents a growing source of employment. The sector employed approximately 16.2 million people globally in 2023, with employment projected to exceed 38 million by 2030 under an accelerated energy transition.
However, the benefits will depend partly on how governments manage the economic and social consequences of moving away from fossil fuels, including support for workers and communities dependent on conventional energy industries.
Grid bottlenecks and policy barriers
Despite falling renewable energy costs, infrastructure constraints and lengthy approval processes remain significant obstacles.
Permitting and development for utility-scale offshore wind projects can take five to nine years in OECD markets. In the United States, approximately 2,600 GW of generation capacity, predominantly wind and solar, was waiting in grid interconnection queues as of 2024, with average waiting periods exceeding four years.
The concentration of critical mineral supplies and manufacturing capacity in a limited number of countries presents additional challenges for renewable energy supply chains.
The authors recommend anticipatory transmission planning, grid expansion, cross-border interconnections, greater deployment of storage and electricity market reforms to accommodate rising shares of renewable power.
They also call for decarbonisation to extend beyond electricity generation into end-use sectors through electrification, green hydrogen for hard-to-decarbonise industries, sustainable bioenergy and circular-economy practices.
The review concludes that achieving a carbon-free energy system will require technology deployment to be supported by affordable financing, stable long-term policies, institutional reforms and international cooperation.
For emerging economies, addressing financing risks and infrastructure gaps could prove as important as further advances in renewable energy technology in determining the speed and cost of the transition.